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Annual Report 2019 Page 1 Annual report 2019 page 1 2019 Annual report H2 2019 Shareholder letter page 2 H2 2019 Shareholder letter page 1 Table of contents Management report ........................................................................................ 3 Message from the CEO ...............................................................................................................................4 Highlights ....................................................................................................................................................7 Description of business activities ..............................................................................................................9 Strategy .....................................................................................................................................................10 Financial objectives ..................................................................................................................................14 Our people .................................................................................................................................................17 Social responsibility .................................................................................................................................21 Compliance ...............................................................................................................................................31 Risk management .....................................................................................................................................37 Statement by the Management Board ................................................................................................... 51 Governance ................................................................................................... 53 Corporate governance .............................................................................................................................53 Report of the Supervisory Board ............................................................................................................62 Compliance with the Dutch Corporate Governance Code .....................................................................67 Remuneration report ................................................................................................................................69 Financial statements ..................................................................................... 83 Annual report 2019 page 2 Annual report 2019 page 3 Management Report Annual report 2019 page 4 message from the ceo What a difference a decade makes At Adyen we build everything for the long term — I sense that some of our investors may have become products, partnerships, and teams. Always moving at accustomed to a certain predictability in our letters speed, with our gaze pointed firmly forward. Allow me to to shareholders and in our financial results — the take a look back, just this once, as 2019 was the keystone unexciting reality of sustained profitable growth, one year of a decade that brought a lot of change for Adyen. instance where boring is good. The reality, however, is that these results are the product of an incredibly In 2010 we were a fledgling operation with a team disciplined team consistently executing on our of around a dozen. Then came our first successful strategy. This is not something we take for granted, partnership with an enterprise merchant, some key and it doesn’t come easily. hires, some successful product launches, some less successful product launches, and thanks to our And 2019 was another year in which we delivered on relentless execution: growth. Now, in 2020, Adyen is our promise. We helped our merchants grow to new a global company with over 1200 people — and 80 heights, processing €240 billion on their behalf. We nationalities — across more than 20 offices from São were also able to onboard leading companies in new Paulo to Sydney. We learned a lot along the way, and verticals, and opened new offices in Mumbai and we have a lot to be proud of, as the industry around us Tokyo. As we continue to grow into new geographies changed a lot too. and verticals on the back of merchant demand, we are well on our way to having the full strength of Adyen During the past decade, we saw the continued rise available across the globe, and in every sales channel. of ecommerce in an increasingly globalized world, an acceleration in innovation across the whole industry, I am writing this in March 2020. This new decade and on the consumer end — still shifting shopper has gotten off to a turbulent start with the outbreak expectations to the point where brands can no longer of COVID-19. We are seeing lockdowns in countries afford to split their online and in-store activities. All of around the world, and changes are entering our way these trends create an opportunity for us to help our of life. We are working hard to help our merchants merchants adapt to this new reality. To be at the forefront function in this new environment, with the best of so much change is tremendously exciting. interest of our employees and society at large in mind. I remain confident in society’s resilience during these Since 2011 we’ve been steadily growing the company challenging times. — profitably — and now increasingly at scale. I’m proud to report that our long-term outlook has not changed; With the team now 100 times larger than it was at the nor has our speed of execution. Our early success was start of the last decade, I look forward to another decade due to us being able to marry engineering and sales. of growing Adyen. We’re all proud of what we’ve built We have been able to keep that union intact throughout together, and thank you for your continued support. our growth trajectory. Keeping our culture has always been, and will continue to be, the focal point for us as a management team. Without our culture, we would Pieter van der Does not have seen the same level of success. At times, our CEO bets didn’t pan out, like when we tried our hand at POS shuttles (the images of which still haunt us), but our speed-based culture has always allowed us to pivot back into the right direction quickly. Annual report 2019 page 5 Signed first global enterprise merchant 2010 Expansion of product offering with risk management tools Our first year as a profitable company 2011 Global expansion: opened offices in San Francisco, London and Paris 2012 Obtained pan-European acquiring license Boarded first two major US tech companies 2013 We reached unicorn status 2014 . Global expansion: opened our Sydney office 2015 Added POS to our service offering Launched Adyen for Platforms . Launched RevenueAccelerate 2016 Obtained acquiring license in Brazil through BIN sponsorship Obtained acquiring licenses in Singapore, Hong Kong, Australia and New Zealand . Obtained European banking license 2017 Launched Checkout Surpassed €100 billion in processed volume Launched 3DS Secure 2 solution . 2018 Launched Terminal API Global expansion: opened offices in Tokyo and Mumbai . Expansion of our payment offering in Africa 2019 Launched Issuing * Pre-2015 volumes and FTE displayed for visualizations purposes only Annual report 2019 page 6 AnnualH1 2019 report Shareholder 2019 letter pagepage 7 7 Highlights . 2017 2018 2019 2017 2018 2019 2017 2018 2019 Processed volume Net revenue EBITDA 51% yoy 42% yoy 54% yoy 239.6 bn 496.7 mn 279.3 mn Innovation on the single platform Spotting new avenues for growth » Ongoing expansion of existing product suite » Successful expansion into quick-service restaurant vertical » Launch of Adyen Issuing » Increased uptake of Adyen for Platforms » Turning regulatory shifts into opportunities » Continued global expansion on the back of merchant demand Key contributions across growth pillars Sustained profitable growth at scale » Enterprise volume continues to be main driver » Net revenue growth increasingly diversified regionally and across merchant base » POS share continues to increase relatively » Increased operating leverage due to low cost-base of single platform » Ongoing investment in mid-market approach for the long-term » Growth of team to 1182 FTE across more than 20 offices Annual report 2019 page 8 AnnualAnnual report report 2019 2019 pagepage 9 9 DescriptionDescription ofof businessbusiness activitiesactivities AdyenAdyen operates operates a a global global payments payments platform, platform, integrating integrating the the full full paymentspayments stack stack — — gateway, gateway, risk risk management, management, processing, processing, acquiring acquiring andand settlement. settlement. The The Adyen Adyen offering offering includes includes a a common common back-end back-end infrastructureinfrastructure for for authorizing authorizing payments payments across across merchants’ merchants’ sales sales channels channels (i.e.(i.e. online, online, mobile mobile and and in-store) in-store) as as well well as as feature-rich feature-rich APIs. APIs. ThisThis payments payments platform platform is is provided provided as as a a service service to to a a range range of of globally- globally- operatingoperating merchants merchants across across different different verticals, verticals, connecting connecting them them directly directly toto Visa, Visa, Mastercard, Mastercard, and and many many other other payment payment methods, methods, providing providing a a high high levellevel of of
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